An internal audit has found that the Housing Authority of Maricopa County still is struggling to handle its finances properly because of a lack of certain internal controls.
The agency, which helps provide affordable housing to lower-income families, in 2010 came under fire from federal auditors for mismanagement.
Following up on that federal audit, internal county auditors recently found inconsistent procedures in processing and approving certain financial transactions. That has led in some cases to the authority underreporting its financial liabilities and overstating revenue.
For example, the agency incorrectly was reporting voided checks as income instead of unclaimed property. County auditors found $18,187 in incorrectly reported unclaimed property in 2010 and 2011.
Reporting unclaimed property is a state requirement. The Housing Authority will adjust its records and report according to state requirements, said agency Director Gloria Muñoz. The agency has signed a compliance agreement with the state.
The Housing Authority launched an investigation into voided checks for low-income and public housing to make sure all previously posted voided checks were classified correctly.
The audit found that the agency also violated county procedures for making purchases and awarding contracts. Auditors said the agency needs more monitoring and enforcement of procurement policies and procedures.
In fiscal 2011, 65 percent of vendor transactions did not have proper approval or follow set procedures. The agency overspent and may not have gotten the best value for what it was spending, the report said.
Transactions worth $1.9 million were done incorrectly, leading to inaccurate reporting of the agency's assets and spending.
County housing officials promised to correct the issues outlined in the audit by July 2013.
"I had an indication that there were some weaknesses there. We've been working toward resolving through policy development and procedure development," Muñoz said. "This internal audit is basically a road map for our plan to address some of the weaknesses there."
U.S. Department of Housing and Urban Development officials in 2010 uncovered more than two dozen financial, procurement and human-resource management problems with the Housing Authority. Doug Lingner, former executive director of the agency, resigned amid allegations of nepotism and mismanagement.
The county Board of Supervisors later that year took tighter control of the Housing Authority and appointed Muñoz, a veteran housing administrator, to direct the organization with the help of an advisory committee. The county audit was the first internal review since Muñoz took the helm.
County Manager Tom Manos said the audit's findings were disappointing. But he said the lack of financial control is not affecting the county's ability to help provide affordable housing for low-income families. He noted the audit did not identify any specific incidents in which housing clients were harmed.
Manos said he has met with Muñoz and has said the county administration will help her agency improve its financial processes.
The Housing Authority and HUD now have corrective-action and repayment plans for the county agency. Most of the authority's budget comes from HUD.
Under Muñoz, the authority has made organizational changes and refocused its strategic priorities. She has made several changes per federal guidelines to bring the agency into good standing with HUD.
Earlier this year, the Board of Supervisors approved a revised Housing Authority ethics code that housing projects seeking federal funding must follow. The agency recently hired a consultant to help it comply with HUD requirements.
Supervisor Mary Rose Wilcox, a public-housing advocate, said she was not surprised by the internal audit's findings, adding that Muñoz made it clear from the start that the agency's longstanding management and financial issues will take longer than one year to resolve.
Wilcox said Muñoz so far has worked to revamp the authority's structure and change the agency's internal culture.
"The prior director and the prior running of the Housing Authority was even worse than we thought, and this audit really proves it," Wilcox said.
by Michelle Ye Hee Lee - Sept. 14, 2012 The Republic | azcentral.com
Audit: Maricopa County housing-agency woes continue
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